Cyber insurance may create false sense of security - FM Global survey

New research by FM Global has suggested that cyber insurance may create a false sense of security among senior financial executives at some of the world’s major companies. The FM Global-commissioned study found that seven in 10 senior financial executives at the world’s largest companies believe their insurer would cover most or all of the company losses caused by a cyberattack – despite some losses being nearly impossible to insure. The poll of more than 100 chief financial officers (CFOs) and other senior financial executives showed that 45% of respondents expected their insurer to cover “most” related losses from a cyber security event, while a further 26% expected their carrier to cover “all” related losses. Most of the effects these financial executives expect to experience in a major cybersecurity breach, however, aren’t typically covered by insurance policies, said FM Global. These effects include degradation of the company’s brand/reputation (46%), increased scrutiny from the investment community (40%), decline in revenue/earnings (38%), introduction of regulatory compliance problems (35%), decline in market share (24%), and decline in share price (24%).

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